Yes, the deals can be cheap, but I think games should be $5-$15 cheaper upon release as well. We no longer own the rights to sell the game, which for those of us that eventually trade the game in, we don't have that value. Not to mention, it is much cheaper to have somebody download a game then to have a physical box that has to get produced, the disk bought, and the box shipped to stores. I know they have some great deals for downloading, but I still don't think they generally justify a download versus a pickup of the physical copy in which I can get something back for it.
Lets give the example that I theoretically downloaded a full game such as Call of Duty X. When Call of Duty XI comes out, I want to sell Call of Duty X, and will be able to make ~$25-$30 after fees doing this. The total cost for the game is $35. The total cost for the downloaded game would be $60. On top of this, in the instance of Black Ops, I preorder this, get $20 off a future game (such as Call of Duty 8). Total cost for that game will be $40 minus a sale of $25 after fees and we have a total cost of $15 instead of the $60 for the download.
@r505Matt: You can get bioshock 1 for 9.99 on pc after shipping. Bioshock 2 is $13.99 after shipping on pc. As for expansions, I will say that when I look at Steam (despite not using it), I do see good deals for that, not to mention I got Portal for free off of Steam, which is really the only reason I downloaded it.